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While Canada’s employment growth stalled in February, the U.S. job market took another leap forward.

One reason is the consumer.

In Canada, consumer spending is slowing while in the U.S. it’s starting to pick up.

And consumers tend to create jobs in labour-intensive industries, such as home construction and retailing.

Canada shed 2,800 jobs last month, Statistics Canada said Friday. That’s well below the estimated 15,000 gain economists had expected, marking the fifth month in a row the numbers have disappointed.

Canada’s unemployment rate dipped to 7.4 per cent last month, but only because 38,000 people gave up looking for work, the data also showed.

The latest job loss was particularly hard on young people, ages 15 to 24 years, especially in Ontario, the data showed.

Meanwhile, the U.S. created 227,000 jobs in February, the third consecutive month of employment growth, according to the U.S. Bureau of Labour Statistics. Unemployment held steady at 8.3 per cent as more Americans began looking for work.

But while the rate of job creation in the U.S. is currently outpacing Canada’s, that wasn’t always the case, economists said.

Canada has already regained all the jobs it lost during the 2008-09 recession while the U.S. is still catching up. Overall, Canada’s labour market is 179,000 jobs above its pre-recession peak.

What we’re seeing now is a structural shift in the way the two economies are recovering, says Doug Porter, deputy chief economist with BMO Capital Markets.

“In a nutshell, we’re seeing a shift in the recovery (in Canada). The first couple of years saw a quick rebound in housing and consumer spending as well as fiscal stimulus. All those sectors are very good at generating lots of jobs. The public sector went on a bit of a hiring spree. The construction industry tends to be very labour intensive,” Porter said in a telephone interview.

“Now what we’re seeing is a transition away from those sectors and more towards exports to the U.S. supported by the manufacturing sector and the resources sector. Those sectors tend to be very productive. They don’t tend to generate a whole lot of jobs.”

“The U.S. economy is almost doing the exact opposite. They got off to a nice start on the productivity side and saw a pretty good bounce in industrial production and very weak consumer spending and housing. But now they’re starting to see the housing market bottom out and (U.S.) consumer spending is recovering.”

Porter said he expects these trends to continue for at least a few more months.

That could be bad news for younger Canadians, many of whom gave up looking for work last month, a trend that worries labour economists.

“This huge withdrawal from the labour force is a sign of weakness in the job market,” Erin Weir, economist for the United Steelworkers of Canada, wrote in an email. “Most of those leaving the labour market were young people in Ontario and Alberta. Nationally, 25,000 of the 38,000 who dropped out were younger than 25.”

As well, real wages in Canada are failing to keep pace with inflation, Weir noted, commenting on the fact average hourly wages grew just 2.1 per cent in February compared to a year ago.

Given the economy’s strong finish in 2011, economists had expected job creation to gain momentum last month, RBC Economics said in a research report to clients.

“Today’s labour report was disappointing in light of the strengthening in real GDP growth that began in December,” Dawn Desjardins, assistant chief economist at RBC, wrote in a note to clients.

Most of February’s job gains were in the goods producing sector, chiefly manufacturing, forestry, mining and construction, where 17,800 new jobs were added, Statistics Canada said.

But that was more than offset by 20,700 jobs losses in the service sector, led by retail, transportation, warehousing, health care and public administration as government austerity measures start to take effect.

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